The Danish traditional company Bang & Olufsen gained a Chinese major shareholder in 2016. The Chinese billionaire Qi Jianhong increased his shares to a total of 20.7% in the fourth quarter of 2016. Acquisition talks in the spring of the previous year led to an involvement of 18.7% by Qi Jianhong. After revenue losses during the financial crisis and losses at B&O for three consecutive years, the acquisition by Sparkle Roll was welcomed. The Sparkle Roll corporate group of Qi Jianhong had already acted as a distribution partner forB&O and also holds further stakes in 'quality consumer goods' like car brands (Bentley), luxury watches, wines, and cigars.
Bang & Olufsen is the HiFi pioneer in the European entertainment industry, known for its high-quality electronic products. The Danish traditional house has been producing high-quality HiFi consumer goods for over 90 years. In addition to headphones, televisions, and home automation products with modern design, B&O is also known for its luxurious stereo systems.
For some luxury stereo systems from Bang & Olufsen, production can amount to up to USD 40,000 per piece. Moreover, the 8,000 TV systems produced by B&O also fall into the higher price segment. Last year, B&O handed over its TV manufacturing to the South Korean company LG to reduce its production costs.
The traditional company has been struggling for years to attract especially young customers. They use more streaming services via their smartphones and are increasingly opting out of high-quality consumer electronics.
The involvement of the Chinese could lead to a soon new upswing at Bang & Olufsen and a comprehensive change in strategy.
Editorial contribution - text only:
Joana Fritsche
(freelance journalist)
Source: Financial Times, article: China’s Sparke Roll ups stake in Bang & Olufsen, 10/2016 by Pan Kwan Yuk
